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New mechanism for making Formula 1 rules comes into force
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Darren Heath
Posted By: James Allen  |  27 Sep 2013   |  11:03 am GMT  |  45 comments

The FIA and Bernie Ecclestone’s FOM group have signed the a bilateral Agreement, guaranteeing the governance and financial structure of F1 through to 2020, it has been announced today.

There has been some confusion about what this means; it is not a Concorde Agreement, it sets out the framework for a Concorde Agreement, but at this stage it is a bilateral agreement between the two parties. Ecclestone also has bilateral agreements with the F1 teams, except Marussia.

Although the FIA’s statement concludes, “Now that the agreement is operative, the parties will move towards the conclusion of a multi-party Concorde agreement,” in practice Ecclestone may not be in any hurry to conclude this, now that the parties are tied in with a series of bilateral agreements and he has argued many times in the past that “F1 doesn’t need a Concorde Agreement”.

Today’s announcement means that the FIA has a greatly improved financial deal from Ecclestone, adding up to €25 million per year, plus the €15 million annually it gets from a levy on F1 teams’ points.

But perhaps the most significant development is the activation of the new rule making process in Formula 1, with the creation of a Strategy Group, made up of 18 voting members, equally split between the FIA, FOM and six leading teams.

This will be new ground for F1 and will hand significant power to the top teams, like Red Bull, Mercedes, McLaren and Ferrari. Williams also has a seat on the group while a sixth seat will be occupied by the highest placed team other than the top four. Currently that would be Lotus.

This would mean, for example, that if there were a serious effort to introduce proper cost controls in F1 and this was backed by the FIA and the FOTA teams, McLaren, Williams and Lotus might side with the FIA, while Ferrari and Red Bull might line up with the FOM vote against. That would leave Mercedes, which is still a FOTA member, with an decisive vote.

Ecclestone will be confident that he can work behind the scenes to win over Williams and Lotus as well as Mercedes in a scenario like that and it will be fascinating, once the FIA presidential election is concluded in December, to see what the FIA does about cost control. Current president Jean Todt had the chance to include cost control into the F1 Sporting Regulations, with the backing of 10 teams but he didn’t want a fight with Red Bull.

Meanwhile now that Niki Lauda and Toto Wolff are running Mercedes, they are a more natural Ecclestone ally than was Ross Brawn.

All of this stacks the odds against F1 getting a really meaningful cost control mechanism in place if Ecclestone, Red Bull, Ferrari and Mercedes don’t want one.

McLaren boss Martin Whitmarsh said in Singapore that this Strategy Group scenario will present some real moments of crisis of conscience for top teams who are part of FOTA as they will be under pressure to represent the smaller teams and to get a serious grip on costs once and for all, but they have their own self interest as well.

The F1 commission is still in place and has not been slimmed down as had been mooted. So if the teams work together with other voting parties like the tyre supplier, sponsors and promoters it is possible that they could overturn a Strategy Group proposal.

This will be a key area for F1 in the next eight years and you will see many stories arising from this new dynamic, partucularly around cost control.

Speaking on today’s announcement Todt said: “We can be proud of this agreement, which establishes a more effective framework for the governance of the FIA Formula One World Championship. The FIA looks forward to continuing to fulfill its historic role as the guarantor of both regulation and safety in F1 for many years to come.”

Todt’s rival for the presidency, David Ward, said, “The final conclusion of the negotiations over the Concorde Agreement is a very positive development for the FIA. This is a solid achievement by Jean Todt and I congratulate him for it. The question now is what will the new resources from Concorde be used for? The answer should be for investment in ‘grass roots’ development of motor sport.

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45 Comments
  1. TGS says:

    Only the strong teams have influence on the rules? Sounds a bit Darwinian. Either all or none surely.

      1. TGS says:

        I assume this was a condition agreed to in exchange for the big teams signing on until 2020. I know F1 is unique but this would be scandalous in other sports.

      2. gpfan says:

        At least they are blatant about it. If the smaller teams did have a vote, the ‘Big Six’ would just bully and scive their way around things to obtain their wishes.

      3. grat says:

        At the very least, the smaller teams should have the ability to send one or (preferably) two representatives with a vote each.

        While it would maintain the “elite status” of the top 6, it would give the smaller teams a voice, and the ability to wheel and deal on close votes.

        Not entirely sure why Williams gets a seat, though.

        Also, 18 votes? Who gets the tie-breaker?

      4. Random 79 says:

        Bernie?

      5. Tim says:

        Frank and Bernie go back a long way and Bernie has always taken care of the Williams team.

    1. Karim says:

      Well its better having 6 leading teams as voting members rather than none at all. Or am I wrong?

  2. Grant H says:

    If I ask for a pay rise, first question is usually “for doing what”

    In the same lines what is the FIA doing or done for F1 to justify another 40 million ??

    All they do is send out a few safety cars, i’ll do that job for say 1 million!

  3. Warren G says:

    Are the current top teams given a permament seat for the full period of the agreement?

    And even though Red Bull have won the championship for the last 3 years and look set to do it again, what historical significance do they have which warrants a say in the rule making process? How sure are we that they would stick around if they weren’t winning anymore like the 3 “old guard”?

    Even Mercs involvement in F1 has been shaky from the start.

    It’ll be interesting to watch, but it just seems weird having the competitors involved in making the rules. I’m all for major changes being up for discussion in consultation but shouldn’t the teams just be given the rules rather?

    1. James Allen says:

      Yes, permanent seats for Red Bull, McLaren, Mercedes, Ferrari, as well as Williams

      1. gpfan says:

        Red Bull is and shall remain a top team;
        until Newey leaves.

        Just like Williams. And McLaren. ;)

      2. gpfan says:

        Forgot to mention that Newey’s contract runs out next year. Mind, at a reported US$10m per year, and much more on offer from the other top teams, I can’t see him retiring.

      3. Liam of Sydney says:

        Yes but once you have a couple’ hundred million in the bank, you don’t need any more. I think he will retire when he gets bored of it. But I agree, I can’t see him retiring next year.

      4. pepe_le_pew says:

        what happens if say, todays leading teams become the futures bottom feeders, what happens to the permanent seats, or is that the essence of their existence, to ensure that the Big Dogs stay BeeG.

  4. Robert says:

    How do the Enstone team feel being behind Williams, over the past 20 years has more success than Williams?

  5. Joe says:

    This won’t last long and won’t be very good while it does. It will go the same way as FOTA and everything else when it comes to decisions from the key players in F1.

  6. C Lin says:

    James, is it true Rubens ia making a comeback to F1 in Sauber next year??

    1. James Allen says:

      Who knows? Villeneuve made a comeback to Sauber and look how that ended!

    2. pepe_le_pew says:

      Me thinks it was harsh how Rubens left coz he still had speed, But Me also believes that F1 is still the pinnacle of mitirspirt and as such, lets find some more Hulks, Vettels and … {The current talent pool is kinda drying up fast, please no Rubens no, some of us Petrovheads wouldn’t be able to stomach it+

  7. Glynn Harrold says:

    Hi Allen,

    Quite a few other sites are stating that this is a new Concord Agreement (PlanetF1 / Autosport). I’m not up on the details of the agreement itself, so not sure who is correct, but it seems someone has it wrong. Is this agreement you mention the per-cursor to the Concord Agreement being sighed off now as a formality?

    Regards
    Glynn

    1. James Allen says:

      Read the detail carefully and you will understand what it is

  8. Harshad says:

    “Strategy Group, made up of 18 voting members, equally split between the FIA, FOM and six leading teams.”

    That’s just [mod]. Why give power to Six teams when there are about 11 competing?
    There was never really a “level playing field” in F1,I guess we would never really have one with this arrangement.

    What will the impact be on the sponsors that sponsor midfield/lesser teams?

    Now, that the top teams have an input in rule making, I think we would never have an year like 2009, where team like Brawn won it against all odds.

  9. Spyros says:

    So James, Red Bull is the only team that would oppose new measures for cost control… interesting.

    Funny how this little nugget didn’t get mentioned in the discussion about booing on the podium recently, isn’t it..?

    1. James Allen says:

      It was against it. Maybe others would be against it too next time?

      1. Spyros says:

        Thanks. I suppose whoever is ahead next time would do the same, given enough cash in hand.

    2. Tim says:

      Why does this surprise you? Money, in motorsport, buys speed and Red Bull have lots of both. It may be Red Bull on this occasion, but none of the big teams have ever been prepared to agree to anything that may disadvantage their position of supremacy – whether it was for the good of the sport or not. You can’t really blame them. Would you do something that was good for your competitors and also at your own expense?

      1. Spyros says:

        …and that (your last question) is exactly why JA and others have been saying that team managers are always thinking short-term. Understandable, but short-sighted.

      2. Tim says:

        Absolutely. Martin Brundle put it very neatly. He said that Team Principals are hard wired to ensure their team is first – if they can’t make themselves faster, then make the opposition slower! The teams shouldn’t really have a say in how the sport is run, they should be presented with a set of regulations etc and invited to participate. The regulations should be set by the FIA with a view to what is best for the sport, but it will never happen. There is way too much money involved and everyone wants their share – including the FIA ;-)

      3. pepe_le_pew says:

        (f1 cost control) – let the wolves run the sheep farm and then expect to see if the butcher gets a supply from that particular farm, why do people insist on continuing this xonversation, in f1 the inmates run the prison, so the rules are a bit different here, you know how it is, the big boys eat first.

        At the moment RedBull are the Biggest inmate and they make the rules.

      4. Spyros says:

        pepe_le_pew:

        It’s one thing to tailor the rules to your tastes (Ferrari did that for ages).

        It’s quite another thing to make rules that can’t be policed, so you can break them (i.e. overspend) as you damn-well please.

    3. Karim says:

      The reason Redbull oppose this is because the RRA as it stands is a load of bs. They don’t have a problem with cost control per se but if the FIA want cost control, they should have a look at the logistics side for the 2014 calendar. It is a joke- travelling to Europe then to the U.S and back again to Europe and back to Asia- how is that cutting costs? Or how is the use of 11 sets of tyres make the F1 world any greener? There are plenty of tangible areas that need reducing but for whatever reason are not highlighted.

      Redbull are being victimised here, and because most of the employees are employed at the technology center and not by the actual team- other teams are trying to find chinks in their armour, because they are so bloody good at what they are doing there in Milton Keynes.

      Also, do we know how much secret information is filtered from the FIAT conglomerate through its subsidiaries down to Ferrari- don’t you think that whatever info is passed between these subsidiaries is valuable? There is no way of monitoring this stuff and the RRA attempts to do just that. On this issue I am with Horner (one of the very few issues I might add). Stability of regulations is the best cost control measure, but every time the regs are overhauled once ever so often- the ones with the most resources wins (Brawn GP exempted).

      They should tear that RRA and start a new agreement. I have never read the agreement, but from the noises I keep hearing it seems these FIA bureaucrats haven’t thought it through properly and maybe would be embarrassed to publish it- coz it will reveal their incompetence and lack of understanding of this subject in its entirety. I am speculating, but at the same time all I am saying is that it is very easy on the outset to point a finger at Redbull for not agreeing to it.

      1. Spyros says:

        In Finland, they have an amateur racing series that has a really interesting way to control costs: all teams agree that their cars have the same nominal cost, so if one appears to be better than the others, its owner is FORCED to accept an offer to swap it with any other competitor’s car, when asked to do so, or he has to retire from the sport. Perhaps that’s what F1 ought to do, I’m sure there would be many takers for Vettel’s car this year…

        Anyway, I think most of us know that in F1, the idea that:

        more money = more success

        …is rubbish. If in doubt, read about Toyota’s F1 story. But in the current ‘no testing’ era, there are so many holes in the RRA that it is indeed a joke. Ross Brawn mentioned a recent example, in McLaren’s recent straight-line testing outing, in… Spain. The idea of allowing straight-line testing, of course, was that nearly all teams could find a straight bit of asphalt (usually at an airfield) near their bases, i.e. at little cost. McLaren’s trip across Europe (well-after the Spanish GP, so it’s not as if they stayed behind) doesn’t really make much sense… not as a straight-line test. Hint-hint.

        The point that some make about the RRA, is that as messy as it is, it ‘probably’ could be made to make sense IF the teams were unanimous in changing it to suit the sport. RBR’s disagreement means that the RRA was not only nowhere to begin with, it stayed nowhere in the months and years that followed. Yes, as you implied, all that F1 teams need to do is have a parent company (or subsidiary of said parent company) do ‘outsourced’ work for them, and all is well: RBR have their technology centre, Ferrari has… well, everyone in Italy, Mercedes has half of Germany and a quarter of Britain (they’re not all-that German, you know) and so on.

        I quite like Ross Brawn and his team, but I briefly enjoyed seeing Force India beat them early in the season, with the same engine, a 50% wind tunnel and fewer resources all around… but of course, as soon as this mid-field team smelled success, they too started behaving in the short-term goal way that has plagued F1′s big-league teams, resisting a change in the tyres that could (and did) harm them.

        Let’s see what next year’s shuffle brings, but unless Renault messes up the engine (unlikely), I don’t see how/why RBR won’t be at the head of the field. And I expect to hear the rustling of lawyers’ feet, about which engine manufacturer could/should/need to be allowed to uprate their engine (or power unit or whatever) a bit, in the interests of competition, etc…

        We need to be patient. Very patient…

  10. f1_fan says:

    you say its framework for Concorde agreement, does it mean these are just proposals ? Also about voting, din’t ferrari have right to veto ? so are they saying that won’t be the case anymore ? can ferrari veto , it’s non-veto’ing proposal ? ;)

  11. VV says:

    So, in all likelihood, F1 will choose to make itself more and more unsustainable. So be it.

    I look forward to the day that the sport implodes and when people who actually care about the sporting side of things and who aren’t completely self-interested are in control. Unfortunately that might take a while.

  12. Kimster says:

    James where does Ferrari fit in all of this? It can over rule any of the other teams can’t it? If it has to go Ferraris way then how does the new structure change anything?

  13. SteveS says:

    The big teams have always had big influence in F1, so this is not a new development. In giving power to the top six teams this is actually a more equitable power-sharing than has existed in the past.

  14. SteveS says:

    “Current president Jean Todt had the chance to include cost control into the F1 Sporting Regulations, with the backing of 10 teams but he didn’t want a fight with Red Bull.”

    Or with Ferrari. Not sure why you left them out.

    1. James Allen says:

      They were on board with the others at that time

      1. Darrin from Canada says:

        Interesting fact

  15. shortsighted says:

    I don’t understand why FIA is to take many million dollars from F1 for its own use when it is said that many smaller teams are struggling for money to survive and keep up with the top teams in races. Is this not threatening the survival of F1 or will the fan be contented with just a few top teams on the track?

  16. Roberto Arroyo says:

    The inclusion of only the top six teams in the strategic group obviously seems very bad, because at the end the other teams as they are running the title shouldbe entitled to have a say; but, as far as i can see this is the first step to get to customer cars, reality is that smaller teams are struggling, the only one that is taking some commercial advantage is Caterham, but Marussia and Sauber are in a very bad position and Toro Rosso is only there for the RB junior drivers programme, therefore the time will come were 2 small teams face shutdown and by that time a customer car alternative will come to the table. What you think James?

    1. James Allen says:

      I think you are on the money.

      1. Alkis says:

        Hi James,

        Don’t you also think it might lead to having 3 cars / team sooner rather than later if not cost cutting measures are agreed?

        Some of the top 6 teams have been very supportive of such a prospect (Ferrari, Red Bull) while others have not really opposed either (McLaren, Mercedes).

  17. Nadeem says:

    What the deal with possible 1 fuel supplier only? I know help with costs but I enjoy the development of making better fuels within reason as seen by James work with Shell earlier on

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